With all the talk of US QE tapering, traders had overlooked the world's second largest economy whose manufacturing output jumped to a four-month high, providing a boost to natural resource stocks. Investors were preparing themselves for the dreaded day when the Federal Reserve would cut back on QE, but with mixed signals about when tapering would begin, investors settled into their seats on the gravy train.
The HSBC Chinese manufacturing index swung from an 11-month low to a four-month high, and while there is still room for improvement China's slowdown may be overstated. Mining stocks broke their three-day losing streak on the back of the positive manufacturing numbers, as bargain hunters got to work. European equities are also in the black as solid eurozone manufacturing and services figures confirm that the region is moving in the right direction.
In the US, we are expecting the Dow Jones to open ten points higher at 14,907, as tapering has been put on the long finger.